1578.HK WACC - Weighted Average Cost of Capital

The WACC of Bank of Tianjin Co Ltd (1578.HK) is 5.2%.

The Cost of Equity of Bank of Tianjin Co Ltd (1578.HK) is 14.45%.

The Cost of Debt of Bank of Tianjin Co Ltd (1578.HK) is 5.00%.

	Range	Selected
Cost of equity	10.40% - 18.50%	14.45%
Tax rate	6.50% - 7.50%	7.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.0% - 5.4%	5.2%

WACC

1578.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.25	2.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	18.50%

Tax rate	6.50%	7.50%
Debt/Equity ratio	17.2	17.2
Cost of debt	5.00%	5.00%

After-tax WACC	5.0%	5.4%


Selected WACC	5.2%

1578.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 1578.HK:

cost_of_equity (14.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.25) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.